WOLFGANG MUNCHAU: The Euro Crisis Won't Be Resolved For 20 Years, If At All

In an FT column published yesterday, columnist
Wolfgang Munchau presents a grim prediction for the eurozone: the
crisis won't be resolved for another 20 years.

Munchau explains that the banking union proposed by EU leaders in
their summit in late June was more or less lip-service to the
European cause, and in reality displayed a continuing lack of
progress towards affecting the crisis:

Angela Merkel’s answer was revealing. She told them that
there is nothing to worry about. The banking union was about
joint supervision, she said. There will be no joint deposit
insurance. She has a very different understanding of a banking
union than the European Central Bank. At most, I expect
this new banking union to cover the 25 largest banks, and leave
those cajas and Landesbanken in national control. This is
like an alcoholic who promises to drink only the better cognacs
from now on.

This course of action, Munchau suggests, would put the
timetable for true fiscal reform in the euro area at something
like 20 years.

Meanwhile, he argues that the stakes are becoming too high
for such behavior to continue. As German support for the euro
currency mounts, it is up to Italy and Spain to present Germany
with an ultimatum: reform or else, because neither country can
afford to stay in the eurozone as things stand right now.

Munchau concludes that instead of progress, he saw this major
takeaway from June's summit:

The message I took away from the summit is that the
eurozone will not resolve the crisis. In that sense, it was
indeed a “historic” meeting.